European stocks bounce back from streak of losses: Markets wrap

(Bloomberg) — European shares opened up on a firmer note, while U.S. stock futures were pressured by reports of new restrictions on artificial intelligence chip sales to China.

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The Stoxx Europe 600 index rose as much as 0.5% as stocks recovered from a six-day streak of losses that ended Tuesday. UPS Group AG advanced as the company prepares to cut more than half of Credit Suisse Group AG’s workforce.

European technology companies have rejected a Wall Street Journal report that said Washington was considering restrictions on chips made for China by Nvidia Corp. and other companies. The news comes from Nvidia and Advanced Micro Devices Inc. ’s shares fell in after-hours trading in New York and kept U.S. equity futures in the red on Wednesday, with tech-heavy Nasdaq contracts down about 0.3%.

Investors also await news from the central bank forum in Portugal, which includes the European Central Bank’s Christine Lagarde, the Federal Reserve’s Jerome Powell, the Bank of Japan’s Kazuo Ueda and the Bank of England’s Andrew Bailey.

Treasury yields were broadly lower, but resilient US economic data underscored the possibility of further monetary policy tightening by the central bank. Lagarde and many other policymakers have insisted that the ECB will continue to raise interest rates.

“Will they stop or not? When will we have a recession? All these kinds of questions on investors’ minds are causing a lot of volume in thin markets,” said Luke Hickmore, investment director at Abrdn.

Signs of economic stress in China are linking markets with the possibility of stimulus measures. Profits at industrial firms fell further last month, data showed on Wednesday, the latest in a string of weak data. The long-term market impact of more U.S. restrictions on technology sales to China is unclear.

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Robert Lea, an analyst at Bloomberg Intelligence, said the restrictions could delay Chinese companies’ AI developments without significantly changing them in the long term.

“Chinese AI companies can also get specialized AI chips from third-party countries,” Lia said. “So I think it will be difficult for the United States to enforce the regulations.”

The results of the central bank’s annual stress test on the banking sector will be out later on Wednesday. Analysts largely expect banks to sail through the tests, even as regulators look to tougher requirements after some of the financial sector’s meltdowns.

Highlights of this week:

  • US Total Inventories, Commodity Trade Balance, Wednesday

  • The Fed is due to release the results of its annual banking sector stress test on Wednesday

  • The policy committee, which includes the ECB’s Christine Lagarde, Fed Chair Jerome Powell, the BOJ’s Kazuo Ueda and the BOE’s Andrew Bailey, on Wednesday.

  • Eurozone Economic Confidence, Consumer Confidence, Thursday

  • US GDP, Initial Jobless Claims, Thursday

  • Atlanta Fed President Rafael Bostick speaks Thursday

  • China Manufacturing PMI, Non-Manufacturing PMI, Balance of Payments, Friday

  • US Personal Income and Spending, University of Michigan Consumer Sentiment, Friday

Some key movements in the markets:

Shares

  • S&P 500 futures were down 0.2% at 3:26 a.m. New York time

  • Nasdaq 100 futures fell 0.3%

  • The future of the Dow Jones Industrial Average was little changed

  • The Stoxx Europe 600 rose 0.5%

  • The MSCI world index rose 0.2%

Coins

  • The Bloomberg Dollar Spot Index rose 0.2%

  • The euro was little changed at $1.0951

  • The British pound fell 0.1% to $1.2735

  • The Japanese yen was little changed at 144.05 per dollar

  • The offshore yuan fell 0.3% to 7.2444 per dollar

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Cryptocurrencies

  • Bitcoin fell 1% to $30,346.25

  • Ether fell 1.6% to $1,863.13

Bonds

  • The yield on 10-year Treasuries was little changed at 3.76%.

  • Germany’s 10-year yield was little changed at 2.36%

  • Britain’s 10-year yield was little changed at 4.38%

materials

  • West Texas Intermediate crude was up 0.2% at $67.83 a barrel.

  • Gold futures fell 0.2% to $1,919.50 an ounce

This story was produced with the help of Bloomberg Automation.

-With assistance from Charlotte Yang, Ameya Garvey and Allegra Catelli.

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